Driftwood Capital has secured new general partner capital allowing $3 billion in deployments over the next five years. The funding came as the company unveiled changes to its structuring and leadership.
Formerly Driftwood Acquisitions & Development, Driftwood Capital has added a new mezzanine lending division. The company plans on issuing loans in the $3 million to $50 million range.
Driftwood Capital also expects to scale up its acquisition and development activity in 2020. The company will target deals across the country in the $30 million to $150 million range, though it has not ruled out larger projects like its planned $250 million 502-key Westin Resort in Cocoa Beach, Fla.
“The decision to scale up our existing acquisitions and development activities and launch a new lending business was driven by two main factors,” Chairman/CEO Carlos J. Rodriguez Sr. said in a statement. “First, we want to continue to meet the growing demand in the marketplace for alternative investments. Second, we want to ensure we have a long runway ahead of us for future capital deployments. In addition, with the launch of our lending platform, we now have the ability to fulfill a growing niche for small to midsize loans in the hotel space.”
Investors in the new GP Funds consist of DAD’s initial investors as well as longstanding limited partner investors, strategic capital partners and other joint-venture partners. A handful of these investors will be named to three advisory boards and investment committees.
Since it launched in 2015, Driftwood Acquisitions & Development placed more than $400 million in limited partner capital in both hotel acquisitions and developments across the United States, representing a portfolio of more than $1 billion in assets.
Driftwood Capital has additionally appointed new leaders to its C-suite, as well as to its lending and development platforms.
The company named Paul Sacco chief investment officer, where he will be responsible for overseeing and exploring strategic growth opportunities for the company as well as portfolio strategy, including oversight of the company’s asset management and investor relations divisions. Before joining Driftwood, Sacco was EVP and president of global development for RLH Corp.
As the company’s new managing director of capital markets, David Steiner will be responsible for directing the firm’s new Mezzanine Lending GP Fund, sourcing mezzanine lending and preferred equity transactions in the hospitality sector, as well as leading the firm’s debt sourcing for its acquisitions and development businesses. Steiner joined Driftwood Capital from Wall Street investment bank Cantor Fitzgerald, where he served as a director in its New York office’s Commercial Real Estate Finance Group.
Driftwood Capital also appointed Nelson Parker managing director of development, where he will lead the firm’s new dedicated development fund. Parker brings more than 20 years of experience to his new role. Most recently he was SVP of corporate development at Penn National Gaming.